Governance

2021 Information Summary

Governance Facts and Figures

• SERC Reliability Corporation (SERC) is a nonprofit regulatory authority for administration of the bulk power system (BPS) reliability in all or parts of 16 southeastern states. • SERC is subject to oversight from the Federal Energy Regulatory Commission (FERC). • SERC has been delegated its authority from the North American Electric Reliability Corporation (NERC) pursuant to Section 215 of the Federal Power Act. • SERC is one of six Regional Entities (REs). • SERC is divided into seven subregions: Central, East, FL- Peninsula, MISO-Central, MISO-South, PJM, and Southeast. • SERC comprises 81 Members, and almost 265 Registered Entities. • A total of 947 member representatives participate in SERC committees. • The SERC footprint covers approximately 630,000 square miles. • SERC Registered entities serve a population of more than 91 million. Our Vision • Capacity resources in the SERC Region for 2020 total 308,310 MW. A highly reliable and secure bulk power system • SERC Registered entities forecast 254,501MW of internal demand (peak load) for the 2021 summer peak. Our Mission • The 2021 annual Net Energy for Load is forecasted to be over 1.3 Million GWh Net Energy for Load, which is approximately To assure effective and efficient reduction of risks to the reliability 30% of the load in the . and security of the bulk power system • As of December 31, 2019, there are 123,950 miles of bulk transmission lines at 100 kV and above in the SERC Region. Governance • SERC interconnects tightly with entities in two adjacent Board Committees Regions: ReliabilityFirst (RF) and Midwest Reliability Organization (MRO). Board Committees are tasked with certain delegated authority matching their expertise to oversee certain areas of the organization and report out to the Board. To ensure the Board SERC Board of Directors remains strategically focused, SERC has delegated certain powers and responsibilities to four (4) standing Board SERC’s governance is designed to assure fair stakeholder Committees for oversight: (1) Board Risk Committee; (2) Human representation and independence in all activities. SERC is Resources and Compensation Committee; (3) Finance and governed by a hybrid Board of Directors consisting of stakeholder Audit Committee; and (4) Nominating and Governance and Independent Directors. In January of 2021, SERC added Committee. Independent Directors to the SERC Board from what had historically been a stakeholder-based board. Through our stakeholder members, we have established a Board that represents every kind of sector that could impact and ensure the reliability and security of the grid. Our stakeholder Directors bring pragmatic and current expertise on risks to the grid and they own the solutions created through their oversight – which is why the model works so well. The addition of Independent Directors and transitioning to a hybrid Board will ensure stakeholder engagement, add independent balance, and keep the organization thoughtful of reputational risks. The Board is responsible for overseeing SERC's affairs according to SERC’s Bylaws and the Delegation Agreement between SERC and NERCBoard Executive Committee The Board Executive Committee (BEC) consists of fifteen (15)

Standing Technical Committees

Technical Committees

In 2005, Congress added section 215 to the Federal Power Act. Under this paradigm, SERC committees have three primary functions: 1. Assist SERC in performing functions delegated by the North American Electric Reliability Corporation (NERC) per the Amended and Restated SERC Regional Delegation Agreement (Delegation Agreement). 2. Perform collaborative efforts to allow registered entities to demonstrate compliance.

3. Perform collaborative efforts to provide general assistance and guidance to SERC members and SERC registered entities. Standing Technical Committees

4. SERC has four standing committees: Critical Infrastructure Protection Committee (CIPC), Engineering Committee (EC), Operating Committee (OC), and Standards Committee (SC).

 The Engineering Committee (EC) provides a mechanism for coordination of SERC planning and engineering activities.  The Operating Committee (OC) facilitates a forum for representatives to coordinate and share experience and information to provide input on operating issues.  The Critical Infrastructure Protection Committee (CIPC) focuses on physical and cyber security of electric systems.  The Standards Committee (SC) promotes development and maintenance of NERC and SERC Reliability Standards and the work plan for SERC Regional Criteria and Guidelines.  The Operations, Planning, and Security Executive Committee (OPSEC) coordinates among the Technical Committee leadership on matters, as necessary, to provide guidance on Bulk Electric System (BES) reliability risk issues.  The Reliability Risk Working Group (RRWG) advises the SERC Operations, Planning, and Security Executive Committee (OPSEC) concerning risks to the reliability of the bulk power system (BPS).

Reliability Risk Working Group (RRWG)

The Reliability Risk Working Group (RRWG) advises the SERC Operations, Planning, and Security Executive Committee (OPSEC) concerning risks to the reliability of the bulk power system (BPS). The RRWG identifies SERC BPS reliability risks from an engineering, operations, and critical infrastructure protection perspective to create a Risk Registry. The Risk Registry is compiled into an annual report that is an input into the SERC Compliance Monitoring and Enforcement Program (CMEP) Implementation Plan.

Some of the RRWG Responsibilities: • Review and Recommend changes to the SERC specific risks identified in the SERC CMEP implementation Plan. • Provide input to the SERC Board of Directors and SERC staff on issues of reliability risk. • Inform and monitor North American Electric Reliability Corporation (NERC) Reliability Issue Steering Committee (RISC) work plans and initiatives, and identify corresponding SERC RRWG activities to coordinate with this subcommittee as directed by the OPSEC. • Provide recommendations to the EC, OC, and CIPC to address and develop mitigation plans for the identified risks. • Develop and exchange information about reliability risk to the BPS, incorporating perspectives from the EC, OC, and CIPC. SERC by the Numbers

SERC, in collaboration with its stakeholders, developed a four-step regional risk framework. Each phase has its own unique set of processes, tools, and engagement with internal and external stakeholders. A defined risk framework provides the structure required for efficient resource allocation and prioritization. The framework also helps SERC to evaluate the effectiveness of the deployed mitigation, which in turn informs the future risk prioritization. In the risk framework visual, the outer circle is included to emphasize that SERC is actively engaging and collaborating with stakeholders throughout the entire process.

Regional Risks

The top reliability risks as identified in the 2020 SERC Reliability Risk Report are listed below 1. Cybersecurity threats result from exploitation of both external and internal vulnerabilities 2. Extreme Weather 3. Variable Energy Resources integration 4. Resource uncertainty/ changing mix along with generation retirements 5. Fuel Diversity/Fuel Availability 6. Transitioning Workforce 7. Technologies and services 8. Pandemic

SERC by the Numbers SERC by Numbers

Net Energy for Load (GWHr) 3 Generating Capacity (MW) 1 Total Internal Demand (MW) 1,2

SERC MISO-Central 19,897 SERC MISO-Central 18,750 SERC MISO-Central 96,527

SERC MISO-South 43,167 SERC MISO-South 33,950 SERC MISO-South 182,223 SERC PJM 31,565.0 SERC PJM 22,163 SERC PJM 116,082 Central 47,632.6 Central 40,952 Central 216,564 East 51,721.2 East 43,624

East 217,836 FL-Peninsula 56,337.2 FL-Peninsula 49,026

Southeast 61,049.9 FL-Peninsula 236,855 Southeast 47,748

SERC Region 309,792.2 Southeast 248,781 SERC Region 254,501

SERC Region 1,314,868 1 2021 Summer Projections

2 Non-Coincident

3 2021 Annual Projection

4 As of 12/31/2019

SERC by the Numbers

4 Transmission Miles 1 2021 Summer Projections 2 SERC MISO-Central 9,000 Non-Coincident 3 2021 Annual Projection SERC MISO-South 16,052 4 As of 12/31/2019

SERC PJM 8,423 Central 21,265 East 23,119 FL-Peninsula 12,387 27,079 Southeast SERC Region 123,950

Anticipated Reserve Margin 1 SERC MISO-Central 12.23% SERC MISO-South 31.31% SERC PJM 48.68% Central 22.15% East 21.21% FL-Peninsula 22.27% Southeast 34.49% SERC Region 27.35%

Capacity Resources

Capacity resources in the SERC Region for 2020 total Net capacity resources in the Region are expected to increase for 308,310MW. the first five years of the 2020-2029 planning horizon to 319,046 MW. Natural gas-fired capacity additions will be largely offset by Natural gas is the primary fuel source in the SERC Region, coal-fired capacity retirements. Capacity resources in the SERC followed by coal, nuclear, and other types (which include pumped Region in 2029 are projected to total 322,901 MW. storage, oil-fired, solar, biomass, wind, and other).

Figure 1: 2019 Capacity Resource Fuel Mix Figure 2: 2029 Capacity Resource Fuel Mix

Demand

The SERC Region’s 2020-2029 Compound Annual Growth Figure 4 shows the forecasted total internal demand by year.. Rate (CAGR) is 0.62 percent, slightly higher than that reported last year of 0.54%.

Figure 4: SERC Region Total Internal Demand Forecast

Figure 3: Subregional 2020-2029 CAGR Reserve Margins

Reference Margin Levels are established to allow NERC to assess the level of planning reserves, recognizing factors of uncertainty involved in long term planning (e.g., forced generator outages, extreme weather impacts on demand, fuel availability, and intermittency of variable generation). SERC utilized the NERC Reference Margin Level of 15 percent. All margins are above the Reference Level over the next 10 years. In addition to Planning Reserve Margin analysis, the 2020 Probabilistic Assessment determines four resource adequacy metrics, which are loss-of-load hours (LOLH), loss-of-load expectation (LOLE), loss-of- load frequency (LOLF), and expected unserved energy (MWh and MPM). At the Anticipated Reserve Margins below, all areas have minimal risk to resource adequacy. In addition to the base case Figure 5: Subregional Anticipated Reserve Margin analysis, the RAWG conducts several sensitivity/scenario cases to assess the resource adequacy impact of reducing the Anticipated Reserve Margins and Increased Maintenance Rates. The published SERC 2020 Probabilistic Assessment is available on SERC’s website.

As shown in figures 5 and 6, all margins are above the Reference Margin Level or PRM over the next ten years.

Figure 6: SERC Region Net Internal Demand vs. Anticipated Capacity Resources Transmission Mileage

As of December 31, 2019, there are almost 124,000 miles of bulk transmission lines operated at 100 kV and above in the SERC Region. Entities within the SERC Region anticipate adding approximately 2,500 miles during the ten-year reporting period. SERC entities coordinate transmission expansion plans in the Region annually through joint model-building efforts that include the plans of all SERC entities. The coordination of transmission expansion plans with entities outside the Region is achieved through annual participation in joint modeling efforts with the ERAG Multi-regional Modeling Working Group (MMWG). Transmission expansion plans by most SERC entities are dependent on regulatory support at the federal, state, and local levels since the regulatory entities can influence the siting, permitting, and cost recovery of new transmission facilities. Figure 7 shows the transmission mileage by operating voltage class.

Figure 7 Bulk Electric System Transmission Mileage by Operating Voltage Class SERC Members

Current Member Listing (As of February 10, 2021) Regional transmission organization / independent system SERC is a membership corporation. As a member of SERC, an operator / reliability coordinator (3) entity can appoint a representative to SERC’s Members Florida Reliability Coordinating Council, Inc. body. Members can help lead SERC, provide input on vital matters Midcontinent Independent System Operator, Inc. and decisions, and also participate in SERC technical committees PJM Interconnection, LLC and working groups.

Cooperative (19) Arkansas Electric Cooperative Corporation (C) Merchant electricity generator (8) Associated Electric Cooperative, Inc. (C) Brookfield Smoky Mountain Hydropower LLC (C) Big Rivers Electric Corporation (M-C) Calpine Corporation (C,M-S) Cooperative Energy (M-S) Cogentrix Energy Power Management, LLC (E) East Power Cooperative (P) Cube Hydro Carolinas, LLC (E) Florida Keys Electric Cooperative Assn (F) Electric Energy, Inc. (C) Georgia System Operations Corporation (S) Northern Star Generation Services Company, LLC Georgia Transmission Corporation (S) Occidental Chemical Corporation (M-S) Lee County Electric Cooperative, Inc. (F) Vistra Energy Corp. (M-C,P) Louisiana Generating, LLC (M-S) North Carolina Electric Membership Corporation (E) Investor-Owned Utility (IOU) (17) Oglethorpe Power Corporation (S) Alabama Power Company (S) Old Dominion Electric Cooperative (E) Ameren Services Company (M-C) Piedmont Electric Membership Corporation (E) Cleco Corporate Holdings LLC (M-S) PowerSouth Energy Cooperative (S) Dominion Energy South Carolina (E) Prairie Power, Inc. (M-C) Duke Energy Carolinas, LLC (E) Seminole Electric Cooperative (F) Duke Energy Florida, LLC (F) Southern Power Cooperative (M-C) Duke Energy Progress, LLC (E) Wabash Valley Power Association, Inc. (M-C) Entergy (M-S) Florida Power & Light Company (F) Federal/State System (3) Florida Public Utilities Company (F) South Carolina Public Service Authority (E) Georgia Power Company (S) Southeastern Power Administration (C,E,S) Gridforce Energy Management, LLC Valley Authority (C) GridLiance Holdco, LP (M-C) Gulf Power Company (S) LG&E and KU Services Company (C) Marketer (2) Mississippi Power Company (S) ACES Southern Company Services, Inc. - Trans (S) Tenaska Power Services Co. Tampa Electric Company (F) Electric and Power Company (DP, TO) (P) SERC Members

Municipal (27) Subregional Affiliation Alabama Municipal Electric Authority (S) (C) - Central Subregion Beaches Energy Services of Jacksonville Beach (F) (E) – East Subregion City of Bartow (F) (F) – FL-Peninsula Subregion City of Columbia, MO (M-C) (M-C) – MISO Central Subregion City of Homestead (F) (M-S) – MISO South Subregion City of Key West (Keys Energy) (F) (P) – PJM Subregion City of Leesburg (F) (S) - Southeast Subregion City of Ocala Electric Utility (F) City of Springfield, IL - CWLP (M-C) City of Tallahassee (F) City of Winter Park (F) ElectriCities of North Carolina, Inc. (E) Fayetteville Public Works Commission (E) Florida Municipal Power Agency (F) Fort Pierce Utilities Authority (F) Gainesville Regional Utilities (F) Illinois Municipal Electric Agency (M-C) JEA (F) Kissimmee Utility Authority (F) Lakeland Electric (F) Memphis Light, Gas and Water Division (C) Municipal Electric Authority of Georgia (S) Nashville Electric Service (C) Utilities Commission of New Smyrna Beach (F) Orlando Utilities Commission (F) Owensboro, KY Municipal Utilities (C) Reedy Creek Improvement District (F)